Budgeting Management Software

A cost budget is a financial plan about your company's identified expenses for the next period. You can make budgets for various costs such as  product development costs.


Production cost planning is used to estimate the per unit cost of manufactured goods and services. The plan itself is detailed with a step-by-step of how to meet production goals. This is developed using forecasting data to anticipate problems and alongside a plan B in the event problems actually occur.

What is 'Production Cost'

Production cost refers to the cost incurred by a business when manufacturing a good or providing a service. Production costs include a variety of expenses including, but not limited to, labor, raw materials, consumable manufacturing supplies and general overhead. Additionally, any taxes levied by the government or royalties owed by natural resource extracting companies are also considered production costs.

Budgeting Management Software

Budgeting Management Software

Budgeting and cost control



Budgeting and cost control comprise the estimation of costs, the setting of an agreed budget, and management of actual and forecast costs against that budget.



A budget identifies the planned expenditure for a project, programme or portfolio. It is used as a baseline against which the actual expenditure and predicted eventual cost of the work can be reported.

Initial cost estimates can be comparative or parametric. These are refined as the feasibility and desirability of the initiative are investigated and a greater understanding of scope, schedule and resources is developed.

Once approval is given, these refined estimates form the baseline cost. By allocating costs to the activities in a schedule, a profile of expenditure is produced.

The Three major components in Budgeting.

  • The Base cost estimate;
  • contingency;
  • management reserve.

The base cost estimate is made up of known costs such as:

  • resourcing (e.g. staff costs or consultants’ fees);
  • accommodation;
  • consumables (e.g. power or IT supplies);
  • expenses (e.g. travel and subsistence);
  • capital items.


Costs have four possible attributes. They may be direct, indirect, fixed or variable:

  • direct costs are exclusive to the project, programme or portfolio; they include resources directly involved in delivering and managing the work;
  • indirect costs include overheads and other charges that may be shared out across multiple activities or different departments;
  • fixed costs remain the same regardless of how much output is achieved, such as the purchase of an item of plant or machinery;
  • variable costs, such as salaries, fluctuate depending on how much resource is used.